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Enlarge ImageRequest to buy this photoMICHAEL TERCHA | CHICAGO TRIBUNERob and Heidi Brown are co-founders of the travel service BitBend. For a fee, they lock in your nonrefundable airfare for a set period.

By Gregory KarpCHICAGO TRIBUNE • Saturday October 27, 2012 5:20 AM

F liers today can find it difficult to keep their options open while trying to get good seats and locking in a good price, especially with airfares changing often and planes more crowded. Nobody wants to buy a $600 nonrefundable ticket, have their plans fall through and not be able to use it — or be forced to pay exorbitant fees to change flights.

That’s precisely the problem several companies aim to fix by selling, or planning to sell, “ options” on airline tickets.

United Airlines offers price lock-in options, while at least three other nonairline companies are starting options services for airfares.

“It could be a value. ... It’s kind of like an insurance policy,” said George Hobica, president and founder of AirfareWatchdog.com, a fare-alert website.

An airfare option works similarly to a stock option. The seller of the option charges a fee to hold your flight reservation at a certain fare, but you’re not obligated to buy a ticket. If your travel plans change, you let the option expire, and you’ve lost only the fee, not the full cost of the plane ticket.

“If you’ve ever coordinated one of those ski trips or golf vacations with a group of friends, you know you can be the sucker who puts down the $500 for the flight, and nobody goes,” said Heidi Brown, co-founder of BitBend, a fare-lock-in startup company in Chicago.

A fare option might work like this: You pay $9 to lock in a ticket at a set fare for three days while you get your spouse or friends to commit to a getaway — or wait for your boss to approve vacation time.

Typically, the longer you hold the fare, the more the option costs. You don’t get your fee back, regardless of whether you make the purchase or let the option expire. For option sellers, it’s a delicate balance of pricing options low enough to entice consumers, but high enough to make money, considering they might not make the final sale. There’s also the risk for the option sellers that a fare could go up while a consumer decides, which means, depending on an option seller’s arrangement with the airline, it might have to pay the difference in ticket prices.

Years ago, airlines would take reservations and hold a fare for free. But like checked bags and onboard meals, that freebie went away. Now, carriers and online travel agencies have instant ticketing, with 24-hour cancellation periods, which is federal law.

“It’s mainly for people with mushy plans — they don’t know if they want to go at all or exactly what day — and they want to lock in a price,” said Rick Seaney, an air-travel analyst and co-founder of FareCompare.com. “I think it’s a niche business. A certain type of person might do it.”

Although it might be a niche product, fare-options companies argue that it’s valuable because plane reservations often are nonrefundable, unlike reservations for hotels, car rentals and restaurants. Buying an option is an alternative to buying a refundable ticket, which can cost twice as much as a nonrefundable ticket, or paying change fees, often $150 per ticket. (A notable exception is Southwest Airlines, which doesn’t have change fees.)

“It’s basically a discount program on refundable tickets,” Seaney said.

And you can decide not to take the trip for any reason, which makes it different from traditional travel insurance.

For example, Hobica wonders why other airlines in the hyper-competitive industry haven’t copied the idea if it is a moneymaker. And the 24-hour cancellation rule helps in many situations where a fare option would be useful, Hobica said. “I’ve never used it, and I don’t think I would use it,” he said of a fare option.

Another hurdle for the smaller companies is building trust. “If you’re a whole new brand, an unknown brand, I think it’s a tougher sell,” Seaney said. People might not be willing to give their credit-card numbers to an unfamiliar company, he said.

“Will it have mass adoption? It doesn’t feel like it would,” Seaney said. “But for a certain number of people, it would be somewhat useful. It just depends on your situation.”

Airfare options

A sampling of services that offer, or plan to offer soon, options on airfares:

UNITED AIRLINES FARELOCK

It’s the only one that’s fully functional. Available for those who book certain United or United Express flights at United.com, allowing you to hold your itinerary and price for either 72 hours or seven days for a fee. You buy FareLock, if available, on the “review trip itinerary” page after you’ve selected flights online. The service locks in a fare in a certain section of the cabin, not a specific seat. The price most often is $9 or more.

BitBend’s co-founders, Rob and Heidi Brown, have their site in a test phase but hope to have it operating in December. It expects pricing to cost $5 to $25. Initially, their service will focus on flights from

Chicago.

STEADYFARE

SteadyFare is also in testing, offering flight options from three airports — JFK in New York City, Los Angeles and San Francisco — to 17 destinations. Co-founder Jack Connor hopes to have the service fully functional by early next year.